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d. Another Director of the company argued that the company should not raise too much funds through bonds. He proposed to raise the fund using

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d. Another Director of the company argued that the company should not raise too much funds through bonds. He proposed to raise the fund using the following sources: - Borrow RM 3M from a bank which charge an interest of 8.5% - Issue 500000 units of Preferred Share for RM2 each with a fixed dividend of 10%. You are required to justify which options of funding is better. Show all your calculations to support your justifications. You have to consider other non- financial factors to justify your answer. ( 17 Marks)

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